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Monday, 06 April 2020 22:08

AutoNation to Lay Off 7K Employees, Cut Costs Deeply

Written by Clark Schultz, Seeking Alpha

AutoNation said April 3 it's taking dramatic measures after seeing significant declines in new and used vehicle unit sales, including a year-over-year decline of approximately 50% during the last two weeks.

The retailer is placing 7,000 employees on unpaid leave, implementing temporary base pay reductions for associates and freezing all new hiring. Widespread spending cuts are also being initiated.

 

On the financial front, AutoNation discloses it had borrowings outstanding of approximately $790 million on March 31 under its revolving credit facility and about $140 million under its commercial paper program.

 

"Based on those borrowings and the maximum leverage ratio contained in our amended and restated credit agreement, we had approximately $1.1 billion of liquidity, including over $400 million of cash and approximately $700 million of availability under our revolving credit facility," AutoNation said.

 

We thank Seeking Alpha for reprint permission. 

 

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